CHK earns a dollar a share. ECA hardly earns anything.
CHK has indicated that earnings are going to double as they switch to natural gas liquids and oil shale production.
In addition, with the next two joint ventures they will have almost $5B to be paid by their joint venture partners for drilling.
CHK is just a much better holding than ECA. ECA will be killed by CHK during the next four years in earnings and share appreciation.
It looks like .44 for ECA and
.68-75 for CHK.
Still, with what the oil companies are doing: Exxon, Shell, BP, their earnings are coming in at under a 10 P/E.
ECA is too expensive compared to CHK and CHK is too expensive compared to the performance of the big three oil companies.
chk, is where it should be,
eca is about 30% bellow where it should be-
eca would make a huge profit if it decides to sell its
shale US assets, and invest back into Canadian oil, gas,
and liquids-or it can hold and develop its shale assets
in the US-shale in the US is hot and it is getting hotter-
eca is lots safer than xom, or bp, or cvx,cop, or hes-
at these pxs it is absolute give away, just loaded on
1) ECA has 10% more daily production than CHK, and trades for a lower equity value
2) CHK is much farther along/aggressive in liquid development
3) ECA's strategy is to lower 9% aftertax on all its ngas projects to 3.00 natgas. Since 96% of production is natgas this makes sense, the low breakeven ultimately creates all the upside and takes pressure of earning. The cost of this is simple: lower liquid development.
4) ECA is growing proven reserves at approx same rate as CHK
5) ECA has less debt than CHK, but CHK has many more non core assets ("drill carry, investments, midstream")
6) ECA is likely to raise $4b+over next 5 months, probably more than CHK
7) CHK is significantly more profitable than ECA with or without hedges. ECA numbers need to be looked at through US GAAP
Given lack of reasonably priced natgas reserves, both these are worth owning. Strategies are different
did my analysis on both and then loaded up the boat on CHK.
CHK while having a little more debt than ECA by the end of 2011 or 2012 is behind on acreage, especially oil acreage in Dakota, Montana, Eagle Ford.
In addition, CHK has its own drilling rigs, 100, and owns 30% of a major fracing company.
Far better value in CHK, no reason to hold ECA when you can own CHK.